June 4, 2021

China’s power in the EU

webinar screenshot
ICDS
Webinar on China's Power in Europe.
Webinar on China's Power in Europe.

China seems to be inescapable as an economic cooperation partner for the European Union. Amidst the growing concerns over China’s disregard for human rights, market distortions, and intellectual property rights violations, it leaves the European states to wonder: how to protect one’s interests, if cutting off relations with China is not a viable option?

A discussion on China’s power in the EU, organized by the ICDS, took place on the 2nd of June 2021. Top experts from France, Sweden, and Germany elaborated on the following key questions:

  • What are the tangible interests of China in the EU? How successful has China been at achieving its interests in the EU? Which threats does economic cooperation with China pose for Europe?
  • In the future, how can the EU defend itself from the potential threats of this cooperation?

“The EU-China relations have changed a lot over the past 12 years,” observed François Godement, the Senior Advisor for Asia to the Institut Montaigne of Paris, Senior Associate of the Carnegie Endowment for International Peace in Washington, D.C., and an external consultant for the French Ministry of Foreign Affairs.

According to professor Godement, the EU has been able to coordinate more unity and resistance to China’s growing power. Stronger commercial defensive structures, investment screening, and anti-dumping policies have been put into place. The EU has also grown more serious about China’s human rights violations. Paradoxically at the same time, China’s economic importance for the EU has increased, as China is gaining influence as the world’s top exporter. “This means the EU-China relationship will remain complex,” he admitted.

Jerker Hellström, Director of the Swedish Center for China Studies and the previous Deputy Director at the Swedish Ministry for Foreign Affairs Office for Strategic Analysis, shared his insights about China’s four main areas of interest in Scandinavia. Among these were defending their core interests and non-interference with Chinese domestic policies; improving perceptions of China in Scandinavia; using Scandinavia as a “door-opener” to the rest of Europe; and acquiring new technologies. He noted that while core interests and non-interference have broadly been achieved, China has not managed to promote a positive image in Scandinavia nor the rest of Europe.

According to Didi-Kirsten Tatlow, Senior Fellow at the Asia Program at the German Council of Foreign Relations (DGAP), the Chinese interests in Germany are somewhat similar. Tatlow shared a story of how she once asked a German diplomat “What does China want from Germany?” upon which he told her “China wants Germany to deliver Europe to China.” Tatlow commented on this: “I suspect he was right.” The EU-China Comprehensive Agreement on Investments (CAI) of December 2020 was arguably very important for Angela Merkel, she said. Whether CAI promotes European norms and values, and whether it considers the interests of smaller states, are questions worth asking. Tatlow warned, however, that economic cooperation with China carries certain risks. “The minute there is a political conflict, there is an economic conflict,” Tatlow explains “the messy web of politics and business” that can endanger sustainable and productive cooperation.

The panelists agreed that in many European states the networks of local business elites can also pose a threat of government capture, decreasing the capabilities of the governments to speak up against China when necessary, in protection of their economic interests. Hellström noted these difficulties: “It is easier to be tough on China when you are not in the government.”

The experts gave 3 suggestions on how to mitigate threats posed by Chinese power in Europe:

  1. European states should be more careful with giving information to “the state that is determined to change us” to protect the local European companies from Chinese knowledge extraction and technological acquisitions.
  2. European companies should keep in mind the potential risks associated with having a significant portion of their market share in China and diversify as much as possible to different countries.
  3. Civil societies in European states need to be vigilant to avoid government capture. A positive trend of grass-root democratic pushback and a sense of distaste is growing already against China’s authoritarian drive. This trend should be welcomed.

In March 2019, the EU Commission issued a strategy paper on EU-China relations that for the first time characterizes China as a “systemic rival” in addition to a cooperation partner. According to our panelists, this signaled a deep change in the way that the European Union perceives China. Cooperation with China is indeed inescapable, but mitigating the posed threats remains possible.

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